The present value factor for determining the present value of $6,300 to be received three years from today at 10% interest compounded semiannually is 0.7462.(PV of $1,FV of $1,PVA of $1,and FVA of $1)
$\bold{\text{(Use appropriate factor(s)from the tables provided.)}}$

Question

Quizplus · Accepted Answer

To calculate the present value of $6,300 to be received three years from today at 10% interest compounded semiannually, we need to use the formula:
PV = FV/(1 + r/n)^(n*t)
where FV = $6,300, r = 10%, n = 2 (since interest is compounded semiannually), and t = 3 years.
Substituting the values, we get:
PV = $6,300/(1 + 0.1/2)^(2*3)
PV = $6,300/(1.05)^6
PV = $6,300/(0.7462)
PV = $8,442.54
Therefore, the present value factor for this calculation is indeed 0.7462. So, the answer is A) True.

The Present Value Factor for Determining the Present Value of $6,300